Some of the biggest developers offer relief for Dubai property owners missing payment installments.
Dubai , Dubai
28 August 2020, 12:00 AM
05 September 2020, 12:00 AM
Many developers in Dubai are starting to offer more flexibility if buyers miss out on their next installments on handed over properties. This means that if payments are missed, the developers will not immediately initiate legal action.
One popular developer said it will take on the management of the property and collect rents from the tenant (if it is leased out). This effectively removes the ‘forfeit clause’ that developers enforce when payment schedules are not met.
Sameer Lakhani, Managing Director at Global Capital Partners, “Developer incentives that are now being offered reflect their intent in resolving payment and liquidity issues being faced by end users/investors,” “The removal of the clause in some cases is a step that is likely to be emulated by developers big and small in the coming months as the real estate market seeks a post-Covid-19 way back,” he added.
Moreover, the developers will also work out ways to get a grip on the payment situation. If the property has been rented out, all cheques collected from the tenant will be handed over “without delay”.
The developer will take over the responsibility of the property as soon as a payment default happens. It is then entitled to use any amount collected from the tenant to settle any late payment charges due under the SPA (sale and purchase agreement), any outstanding service fees, any payment to the authorities or utilities service providers.
Sources say private developers too could come up with similar measures to boost confidence among their buyers.
“As always, Dubai’s big developers are showing the way in tackling the uncertainty caused by COVID-19 on buyers’ incomes,” said an industry source. “If they give the assurance that their asset – the property – is safe, there’s more motivation to clear the rest of the payments.”